DEFINITION of '18-Hour City'

​What is an '18-Hour City'

A second-tier city with above-average urban population growth that offers a lower cost of living and lower cost of doing business than first-tier cities. In real estate investing, 18-hour cities are seen as viable investment alternatives to the "big six" markets of Boston, Chicago, Los Angeles, New York, San Francisco and Washington, D.C.

BREAKING DOWN '18-Hour City'

The term ‘18-hour city’ refers to a secondary real estate market that offer services, amenities and job opportunities on a scale with the big six markets but does not operate on a 24-hour basis. These cities typically feature widespread urban development, a solid public transportation infrastructure, a strong economy and moderately priced housing.

Employers are drawn to 18-hour cities because doing business is less expensive in these markets and this, in turn, attracts large numbers of job seekers. Cities such as Charlotte, Denver and Portland, for example, have become targets for Millennials whose goal is launching or advancing their career. 18-hour cities are often characterized by the availability of recreation and entertainment opportunities that extend beyond what the typical suburban city affords.

For real estate investors, 18-hour cities have emerged as a more affordable investment option compared to larger markets. These cities are attractive because they typically feature lower cap rate compression, meaning property values tend to remain stable rather than spiking up or down significantly. One potential downside, however, is the increased degree of risk associated with 18-hour city investments because they do not have the established track record of primary market cities.

 

 

BREAKING DOWN '18-Hour City'

RELATED TERMS
  1. The City

    The main financial district of London, and one of the world's ...
  2. Reserve City Bank

    A bank that is found in any city that also has a Federal Reserve ...
  3. Cost of Living

    The amount of money needed to sustain a certain level of living, ...
  4. Real Estate Tier Classifications: ...

    Cities are categorized as Tier I, Tier II, or Tier III depending ...
  5. New York Dollar

    The buying power of a U.S. dollar in the city of New York. The ...
  6. Tax Roll

    A breakdown of all property within a given jurisdiction, such ...
Related Articles
  1. Managing Wealth

    ‘18-Hour Cities’: The Next Big Thing for Real Estate Investors

    The rise of the ‘18-hour city’ is the latest trend to hit real estate – with high growth potential for investors.
  2. Managing Wealth

    5 Cities That Give You the Best Chance to Get Rich

    If you want to build sustainable wealth, where you choose to hang your hat can have a significant impact on your success.
  3. Personal Finance

    Top 10 Most Expensive Cities in the U.S.

    New York City tops the list of most expensive cities in the U.S., and five of them are located in California.
  4. Personal Finance

    The Top 5 Under-the-Radar Cities for Job Seekers

    Don't be misled by 'Top 10' lists that rank cities purely on job growth. These cities get top marks for income growth and other key factors.
  5. Personal Finance

    How Much Money Do You Need to Live in NYC?

    Learn how much money you need to meet basic expenses in New York City as a student, as a professional and as an unemployed job seeker.
  6. Small Business

    The Best City to Become An Entrepreneur Is What?!

    These four U.S. cities form a new landscape of cities that nurture the entrepreneurial spirit.
  7. Investing

    The 8 Best U.S. Cities for Millennials

    For Millennials who want a tech- and start-up-friendly locale, these urban centers fill the bill, but they may need roommates to afford the housing.
  8. Investing

    How Citigroup Ensured That It's Too Big to Fail

    As a business, Citi has everything going for it. Scale, operational breadth...and the ear of key policymakers.
  9. Personal Finance

    Top States For Investment Bankers

    We look at cost of living, tax rates and opportunity to find the best places in the U.S. for investment bankers.
  10. Personal Finance

    5 U.S. Cities with High Paychecks and a Low Cost of Living

    Consider these U.S. hubs where workers get paid competitive salaries while enjoying a high quality of life due to a low cost of living.
RELATED FAQS
  1. What's the most expensive city in the world to live in?

    Find out which cities are the world's most expensive to live in, and learn how the Economist's yearly cost of living index ... Read Answer >>
  2. Which US cities have the highest number of high-income households?

    Learn which U.S. cities have the highest number of high-income households and why they were able to attract such a large ... Read Answer >>
  3. In which US cities do high-income earners pay the most tax?

    See which U.S. cities punish high net worth individuals the most through the highest levels of income taxes, property taxes ... Read Answer >>
  4. How can data assist operations management in increasing efficiency?

    Learn how pork barrel spending provides economic benefits locally but usually results in negative economic consequences on ... Read Answer >>
  5. How is the cost of living index calculated?

    Discover how calculations for cost of living indexes are made based on the average prices of common goods and services between ... Read Answer >>
  6. What are some of the challenges in real estate development?

    Learn what real estate development is, what developers do, and how real estate development is hindered by both risks and ... Read Answer >>
Hot Definitions
  1. Dividend Yield

    A financial ratio that shows how much a company pays out in dividends each year relative to its share price.
  2. Fixed-Income Security

    An investment that provides a return in the form of fixed periodic payments and the eventual return of principal at maturity. ...
  3. Free Cash Flow - FCF

    A measure of financial performance calculated as operating cash flow minus capital expenditures. Free cash flow (FCF) represents ...
  4. Leverage Ratio

    Any ratio used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to ...
  5. Two And Twenty

    A type of compensation structure that hedge fund managers typically employ in which part of compensation is performance based. ...
  6. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
Trading Center